Stop trying to be ‘responsible’ on the budget, Democrats

Now that Republicans have stopped pretending to care about the deficit, it’s time for Democrats to stop actually caring about the deficit.

Unfortunately, we have a situation where one party invariably balloons the deficit whenever it takes power, yet somehow retains a reputation for “fiscal conservatism,” while the other party works hard to make sure everything it does when it’s in power is fully paid for, yet somehow gets tagged as profligate spenders squandering taxpayer resources.

The way out of this losing game would be for Democrats to stop playing. But they can’t seem to bring themselves to do it:

House Minority Leader Nancy Pelosi (Calif.) and other top Democrats are vowing to abide by fiscally hawkish pay-as-you-go rules if they seize the majority next year, rejecting calls from liberals who feel they’d be an impediment to big legislative gains.

Pelosi, who adopted “pay-go” rules when she held the Speaker’s gavel more than a decade ago, says she’ll push to do it again if the Democrats win the House in November’s midterm elections.

“Democrats are committed to pay-as-you-go,” Pelosi spokesman Drew Hammill said Tuesday, affirming the policy would be a 2019 priority.

This manages to be both bad policy and bad politics, which isn’t an easy trick to pull off.

Pay-go has always been something Democrats used in an attempt to demonstrate that they’re fiscally responsible, not the big spenders Republicans accuse them of being. And they are fiscally responsible. For instance, when they passed the Affordable Care Act, a long-desired and ambitious reform of the health-care system, they made sure every cent of new spending was paid for by a combination of tax increases and spending cuts elsewhere.

Compare that with what Republicans did when they passed their recent tax cuts, which were also long-desired and ambitious: They simply waived the pay-go rules and insisted that the tax cuts would pay for themselves eventually anyway because Bigfoot would ride in on a unicorn and give every American a handful of magic beans.

Pay-go has its origins in a 1990 budget agreement, but when Republicans have been in charge, they’ve tended to waive it so they could pass what they wanted. When Democrats took back Congress in 2006 (under Pelosi’s leadership), they proclaimed their commitment to pay-go as evidence that unlike George W. Bush — who used deficit spending to fund a couple of wars and a couple of tax cuts — they’d bring back fiscal probity. In 2010, they even passed a law, which President Barack Obama signed, mandating that new spending had to be paid for with tax increases or cuts elsewhere (there’s more of an explanation here).

So it winds up being something that binds Democrats but has no effect on Republicans, who are happy to waive the requirements whenever they like or find some other way around them. Only Democrats ever bother answering the “How are you going to pay for this?” question for their legislative priorities.

So what are the consequences of Democrats making this pledge? If they’re successful in winning back Congress this year and winning the White House next year, it could seriously hamper their ability to pass progressive legislation without imposing spending cuts. And given the metronomic swings of power that have characterized Washington in recent years — one party wins the White House, then two years later the other party wins Congress, then as soon at the opposition takes back the White House it loses Congress, repeat ad infinitum — they may only have two years starting in 2021 to advance the progressive goals they’re in the process of formulating. Every one of those efforts that involves federal spending could be bogged down in excruciating negotiations about where spending cuts or tax increases are going to be made to pay for it all.

Politically, this serves almost no purpose. Whatever tiny benefit Democrats might get from telling everyone how responsible they’re being will be dramatically offset by the risk that they’ll have trouble passing their (extremely popular) agenda. Are they really foolish enough to think that it matters whether some corporate-funded centrist think tanks scolds them for not holding the line on deficits? Who cares?

Voters certainly don’t, even if they might nod their heads when somebody says, “Your family has to balance its budget, so government should have to too.” I should note that Obama was disturbingly prone to using this completely inaccurate formulation, but the truth is that government doesn’t have to balance its budget. The last time it did was 20 years ago, and since we can borrow money for almost nothing, it’s often the case that the wisest course is to borrow in order to fund important programs.

Voters will reward Democrats if the legislation they pass makes those voters’ lives better. If more people have health coverage, more people can access college and more people have economic security, Democrats won’t be punished if they increase the deficit, just as Republicans haven’t been punished for it in the past.

That doesn’t mean Democrats should never pay for what they spend. As a general rule, it’s perfectly fine. But they should not make any blanket promises to uphold pay-go always and everywhere. All it will do is make their goals harder to achieve.

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